Jet2 bolsters its finances with £150m loan signing and £387m bond offering

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Leeds-headquartered travel group, Jet2, is shoring up its finances by signing a new £150m term loan.

And it is launching an offering of approximately £387.4m worth of guaranteed senior unsecured unrated convertible bonds, which are due in 2026.

The group notes it has previously taken “decisive action” over the past year, by raising nearly £1bn in liquidity from a diverse range of sources to mitigate the impacts of the pandemic, including £200m from the Bank of England’s Covid Corporate Financing Facility.

It says its liquidity position is strong, with the group’s cash position as of 31 March 2021 comprising unaudited total cash of £1,379m and own cash (excluding advance customer deposits) of £1,062m (2020: £520m), an increase of 104% on the prior year end.

The company intends to resume its flying operations on 24 June 2021.

In a trading update today the listed business states: “Given the continued short-term uncertainty, we remain encouraged by the volume of customer bookings to date for both winter 2021/22 and for summer 2022, for which package holiday bookings are displaying a materially higher mix of the total.

“The offering aims to complement Jet2’s existing capital structure and takes advantage of the current financing environment through the issuance of the Convertible Bonds.

“The proceeds of the issuance of the Convertible Bonds will be used to strengthen Jet2’s balance sheet further and position the company for a strong recovery as lockdown restrictions are lifted, through fleet growth and fleet renewal opportunities. 

“In addition to the Convertible Bonds and the company’s existing revolving credit facility, Jet2 has also signed a new unsecured £150m term loan maturing in September 2023 as further liquidity to enhance balance sheet capability and flexibility.

“These transactions together, further improve the ability for and Jet2holidays to capitalise on any upturn opportunities, benefiting all stakeholders, including shareholders.”